<PAGE> 1
SEMIANNUAL REPORT TO
SHAREHOLDERS FOR THE PERIOD
ENDED JUNE 30, 1998
LONG-TERM INVESTING IN A SHORT-TERM WORLD(SM)
[LOGO]
Seeks high current income consistent with prudent total return asset management
by investing primarily in investment grade foreign and domestic fixed income
securities.
KEMPER
GLOBAL INCOME FUND
"... We maintained a conservative approach, emphasizing
very high quality government bonds issued by
developed nations and supranational bonds. ..."
[KEMPER FUNDS LOGO]
<PAGE> 2
At A GLANCE
CONTENTS
3
ECONOMIC OVERVIEW
5
PERFORMANCE UPDATE
7
COUNTRY CONCENTRATIONS
8
PORTFOLIO STATISTICS
9
PORTFOLIO OF
INVESTMENTS
11
FINANCIAL STATEMENTS
13
NOTES TO
FINANCIAL STATEMENTS
17
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------
KEMPER GLOBAL INCOME FUND
TOTAL RETURNS
- --------------------------------------------------------------------------
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1998
(UNADJUSTED FOR ANY SALES CHARGE)
[BAR GRAPH]
- ---------------------------------------------------------------------------
<TABLE>
<S> <C>
CLASS A 2.64%
CLASS B 2.11%
CLASS C 2.13%
LIPPER GENERAL WORLD INCOME FUNDS AVERAGE* 2.09%
</TABLE>
Returns and rankings are historical and do not guarantee future performance.
Returns, rankings and principal value fluctuate. Shares are redeemable at
current net asset value, which may be more or less than original cost.
*Lipper Analytical Services, Inc. returns and rankings are based upon changes in
net asset value with all dividends reinvested and do not include the effect of
sales charges and, if they had, results may have been less favorable.
NET ASSET VALUE
<TABLE>
<CAPTION>
AS OF AS OF
6/30/98 12/31/97
......................................................
<S> <C> <C> <C> <C>
KEMPER GLOBAL INCOME FUND
CLASS A $8.55 $8.58
......................................................
KEMPER GLOBAL INCOME FUND
CLASS B $8.56 $8.60
......................................................
KEMPER GLOBAL INCOME FUND
CLASS C $8.58 $8.62
......................................................
</TABLE>
KEMPER GLOBAL INCOME
FUND RANKINGS AS OF 6/30/98
COMPARED TO ALL OTHER FUNDS IN THE LIPPER GENERAL WORLD INCOME FUNDS CATEGORY*
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
......................................................
<S> <C> <C> <C> <C> <C>
1-YEAR #84 of #100 of #98 of
140 funds 140 funds 140 funds
......................................................
5-YEAR #24 of N/A N/A
57 funds
......................................................
</TABLE>
DIVIDEND AND YIELD REVIEW
THE FOLLOWING TABLE SHOWS PER SHARE DISTRIBUTION AND YIELD INFORMATION FOR THE
FUND AS OF JUNE 30, 1998.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
......................................................
<S> <C> <C> <C> <C> <C>
SIX-MONTHS INCOME: $.2550 $.2209 $.2227
......................................................
JUNE DIVIDEND: $.0425 $.0367 $.0368
......................................................
ANNUALIZED
DISTRIBUTION RATE+: 5.96% 5.14% 5.15%
......................................................
SEC YIELD+: 3.53% 2.81% 2.88%
......................................................
</TABLE>
+Current annualized distribution rate is the latest monthly dividend shown as an
annualized percentage of net asset value on June 30, 1998. Distribution rate
simply measures the level of dividends and is not a complete measure of
performance. The SEC yield is net investment income per share earned over the
month ended June 30, 1998, shown as an annualized percentage of the maximum
offering price on that date. The SEC yield is computed in accordance with a
standardized method prescribed by the Securities and Exchange Commission.
The special risk considerations associated with an investment in the fund,
including risks related to foreign investments and to a non-diversified
investment company, are discussed in the prospectus. Risks associated with
foreign securities, including fluctuating exchange rates, government regulations
and differences in liquidity, may affect your investment. As a non-diversified
investment company, the fund may invest more than 5% of its assets in the
securities of a particular foreign government.
TERMS TO KNOW
YOUR FUND'S STYLE
MORNINGSTAR INCOME STYLE BOX
<TABLE>
<S> <C>
[MORNINGSTAR EQUITY STYLE Source: Morningstar, Inc., Chicago, IL
BOX] 312-696-6000. (Morningstar's Style Box is
based on a portfolio date as of June 30,
1998.) The Income Style Box placement is based
on a fund's average effective maturity or
duration and the average credit rating of the
bond portfolio.
Please note that style boxes do not represent
an exact assessment of risk and do not
represent future performance. Please consult
the prospectus for a description of investment
policies.
</TABLE>
BASIS POINTS The smallest measure used in quoting yields on bonds and notes. One
basis point is 0.01 percent of yield.
DURATION A measure of the interest rate sensitivity of a portfolio,
incorporating time to maturity and coupon size. The longer the duration, the
greater the interest rate risk.
CURRENCY RISK The U.S. dollar value of a foreign security tends to decrease when
the value of the U.S. dollar rises against the foreign currency in which the
security is denominated. Conversely, the U.S. dollar value of a foreign security
tends to increase when the value of the U.S. dollar falls against the currency.
<PAGE> 3
ECONOMIC OVERVIEW
[SILVIA PHOTO]
DR. JOHN E. SILVIA IS A MANAGING DIRECTOR OF SCUDDER KEMPER INVESTMENTS, INC.
HIS PRIMARY RESPONSIBILITIES INCLUDE ANALYSIS, MODELING AND FORECASTING OF
ECONOMIC DEVELOPMENTS AND FEDERAL RESERVE ACTIVITY THAT AFFECT FINANCIAL
MARKETS, ESPECIALLY INTEREST RATE TRENDS. THIS EFFORT INCLUDES CLOSE
COLLABORATION WITH BOTH INCOME AND EQUITY MUTUAL FUND MANAGERS AND PENSION FUND
MANAGERS.
SILVIA HOLDS A BACHELOR OF ARTS AND PH.D. IN ECONOMICS FROM NORTHEASTERN
UNIVERSITY IN BOSTON AND HAS A MASTER'S DEGREE IN ECONOMICS FROM BROWN
UNIVERSITY IN PROVIDENCE, R.I. PRIOR TO HIS CAREER AT SCUDDER KEMPER, HE WAS
WITH THE HARRIS BANK AND ALSO TAUGHT AT INDIANA UNIVERSITY.
SCUDDER KEMPER INVESTMENTS, INC. IS THE INVESTMENT MANAGER FOR KEMPER FUNDS. IT
IS ONE OF THE LARGEST AND MOST EXPERIENCED INVESTMENT MANAGEMENT ORGANIZATIONS
WORLDWIDE, MANAGING MORE THAN $218 BILLION IN ASSETS GLOBALLY FOR MUTUAL FUND
INVESTORS, RETIREMENT AND PENSION PLANS, INSTITUTIONAL AND CORPORATE CLIENTS,
INSURANCE COMPANIES AND PRIVATE, FAMILY AND INDIVIDUAL ACCOUNTS. IT IS ONE OF
THE 10 LARGEST MUTUAL FUND COMPLEXES IN THE UNITED STATES.
DEAR SHAREHOLDERS,
It's been a bumpy ride for many investors in the third quarter of 1998, with
concern over corporate profits generating considerable market volatility. On
August 4, the Dow Jones Industrial Average suffered its largest single-day point
drop for the year. While this was the Dow's third largest point decline in
history, it didn't even make the top 100 in terms of percentage losses. In any
event, stock market tensions spilled over into the bond markets, fueling the
debate about whether we would finally see the end of our long-running bull
market -- or even plummet into a recession.
But investors who are riding out the stock market's abrupt short-term
adjustments should find comfort in the fact that economic fundamentals continue
to favor financial assets in the United States. In a nutshell, the nation's
economy remains strong despite its slowdown in the second half of the year.
Short-term interest rates are expected to remain low -- the federal funds rate
is holding at 5.5 percent and will most likely stay put for the remainder of
the year. There are no major tax or regulatory threats waiting in the wings.
And our economy continues to draw investors from around the world, although
perhaps not as fervently as last year.
The nation's gross domestic product (GDP), which represents the total
value of all goods and services produced within the U.S. economy, grew at an
annualized rate of 1.4 percent in the second quarter of 1998. While this was
the slowest growing quarter in the last three years, it was much stronger than
consensus. Slower growth can be attributed to several factors, including the
impact of decreased trade with Asia, domestic corrections in inventory levels
and the General Motors strike, which has since been resolved.
Real capital spending and employment growth have remained solid.
Consumer confidence remains fairly high. Home sales remain robust. Economic
policy continues to support the nation's fiscal budget surplus projection of
$65 billion.
As far as inflation goes, there are two tales to be told. Prices for
consumer goods, as measured by the consumer price index (CPI), are steady.
Compare this to prices for services, which have risen between 3 and 4 percent.
For investors, this difference in pricing flexibility translates into a
difference in profit expectations. Profits of domestic service firms should be
much stronger than commodity producers dependent on export markets.
Across the Atlantic, Europe's economy appears to be growing at an even
pace as the region progresses toward the Economic and Monetary Union (EMU)
slated for January 1, 1999. One effect of the union may be a slight rise in
short-term interest rates in Europe -- not because there will be an overt
change in policy, but simply because of the convergence of some very disparate
interest rates. The average rate will likely be higher than the relatively
attractive rate the German Central Bank currently offers, for example.
In Asia, which has been making headlines around the world for more than
a year now, the latest news is from Japan, which recently installed a new prime
minister as well as a new finance minister. Much discussion will be focused on
changes in Japan's economic policy, particularly in terms of taxation and
banking reform -- and patience is in order. Most of the changes in taxation
will impact Japan in the first half of 1999. But as far as banking reform goes,
those of us familiar with bank reform in the U.S. know that this will be a two-
to five-year process. Certainly, investors are looking to Japan to spark
recovery for Asia as a whole, which continues to suffer from the "contagion" of
low currency values, seriously reduced consumer spending and general economic
malaise.
Indeed, while its full effects remain to be seen -- and felt -- by the
majority of American businesses and individuals, the Asian economic crisis has
contributed to the general uncertainty of the emotion-driven U.S. markets.
Whether it's an economic crisis abroad or political scandal at home, current
events move the investors who move the markets.
One might conclude that, as a result of today's low corporate profits
and lingering turmoil in Asia, the psychology of the markets is shifting --
even some of Wall Street's most resolute bulls appear to be reconsidering their
long-held convictions. But with the economy's strong
3
<PAGE> 4
ECONOMIC OVERVIEW
- --------------------------------------------------------------------------------
ECONOMIC GUIDEPOSTS
- --------------------------------------------------------------------------------
Economic activity is a key influence on investment performance and shareholder
decision-making. Periods of recession or boom, inflation or deflation, credit
expansion or credit crunch have a significant impact on mutual fund
performance.
The following are some significant economic guideposts and their
investment rationale that may help your investment decision-making. The 10-year
Treasury rate and the prime rate are prevailing interest rates. The other data
report year-to-year percentage changes.
[BAR GRAPH]
<TABLE>
<CAPTION>
NOW (7/31/98) 6 MONTHS AGO 1 YEAR AGO 2 YEARS AGO
<S> <C> <C> <C> <C>
10 -YEAR TREASURY RATE(1) 5.46 5.57 6.3 6.64
PRIME RATE(2) 8.5 8.5 8.5 8.25
INFLATION RATE(3)* 1.62 1.57 2.16 2.95
THE U.S. DOLLAR(4) 8.79 5.05 10.01 4.26
CAPITAL GOODS ORDERS(5)* 10.44 12.61 10.3 17.23
INDUSTRIAL PRODUCTION(5)* 3.66 5.38 4.69 4.08
EMPLOYMENT GROWTH(6) 2.45 2.78 2.39 2.25
</TABLE>
(1) Falling interest rates in recent years have been a big plus for financial
assets.
(2) The interest rate that commercial lenders charge their best borrowers.
(3) Inflation reduces an investor's real return. In the last five years,
inflation has been as high as 6 percent. The low, moderate inflation of the
last few years has meant high real returns.
(4) Changes in the exchange value of the dollar impact U.S. exporters and the
value of U.S. firms' foreign profits.
(5) These influence corporate profits and equity performance.
(6) An influence on family income and retail sales.
* Data as of June 30, 1998.
SOURCE: ECONOMICS DEPARTMENT, SCUDDER KEMPER INVESTMENTS, INC.
fundamentals in place, that outlook may be premature. In any case, prudent
investors are wise to watch for the following economic warning signs: inflation
in the form of rising wages and/or prices; residual fallout from Asia,
which could appear in the form of reduced sales and earnings for American
businesses; and a continued widening of our trade deficit, an imbalance caused
by heightened American demand for foreign goods and services. In the months to
come, investors are likely to maintain their bias in favor of investments that
have historically been considered more conservative: larger capitalization
stocks, U.S. Treasuries and only the highest-grade corporate bonds.
Thank you for your continued support. We appreciate the opportunity to
serve your investment needs.
Sincerely,
/s/ John E. Silvia
JOHN E. SILVIA
August 12, 1998
4
<PAGE> 5
PERFORMANCE UPDATE
[JOHNS PHOTO]
GORDON JOHNS JOINED SCUDDER KEMPER INVESTMENTS, INC. IN 1988 AND HAS BEEN THE
LEAD PORTFOLIO MANAGER OF KEMPER GLOBAL INCOME FUND SINCE ITS INCEPTION IN 1989.
JOHNS GRADUATED WITH A BACHELOR'S DEGREE IN LAW FROM BALLIOL COLLEGE IN OXFORD,
UNITED KINGDOM.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT, AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME, BASED ON MARKET AND OTHER
CONDITIONS.
WHILE GLOBAL BOND MARKETS PROVIDED STRONG RETURNS IN LOCAL CURRENCY TERMS IN
THE FIRST HALF OF 1998, THEIR GAINS WERE DIMINISHED BY THE STRONG U.S. DOLLAR
WHEN CONVERTED. THE FOLLOWING IS A DISCUSSION OF THE GLOBAL BOND MARKETS AND
FUND PERFORMANCE WITH PORTFOLIO MANAGER GORDON JOHNS.
Q GORDON, HOW WOULD YOU DESCRIBE THE PERFORMANCE OF THE GLOBAL BOND MARKETS
IN THE FIRST HALF OF 1998?
A Global inflationary pressures subsided and interest rates generally
drifted lower in the first six months of this year, thanks in large part to the
economic and currency turmoil in Southeast Asia. In response, most global bond
markets performed fairly well in local currency terms, posting an average total
return of 4.28 percent. The United Kingdom provided the best returns as interest
rates in that country fell by more than 40 basis points year to date, and the
sterling appreciated 1.50 percent versus the U.S. dollar. The U.K. was up 5.92
percent in local currency terms and 7.41 percent in U.S. dollar returns for the
first six months of 1998.
However, the strength of the U.S. dollar versus most other currencies
muted the performance of the fund and its competitive peer group. Japan, for
example, was up 2.56 percent in local currency terms. But because of the
continued weakness of the yen the Japanese bond market was off 3.92 percent in
U.S. dollar terms.
Unfavorable currency movements also diminished the gains posted by most
other developed markets -- including much of Europe, Canada, Australia and New
Zealand. To the dollar-based investor, dollar strength reduced local currency
returns by around 140 basis points year to date. However, the fund's total
dollar exposure, including hedges, ranged from 54 percent to 59 percent
throughout the period and helped offset some of the negative exchange-rate
effects of the dollar's appreciation against foreign currencies.
Q HOW DID THIS ECONOMIC ENVIRONMENT AFFECT YOUR INVESTMENT STRATEGY?
A We maintained a relatively conservative approach, emphasizing very high
quality government bonds issued by developed nations and supranational bonds.
With the emerging markets in Southeast Asia and Latin America remaining under
pressure during the first half of this year, we avoided the losses associated
with them. At the end of the year, 72 percent of the fund's net investments were
in AAA-rated issues and 28 percent were in AA-rated securities. Maturities
remained in the intermediate range at 7 to 8.5 years. We kept the fund's
duration--which measures its sensitivity to changing interest rates--at a
neutral level, a position we take when we think interest rates will remain more
or less stable.
Our conservative stance helped the fund meet its objective of providing
competitive bond market returns. For the six months that ended June 30, 1998,
the fund was up 2.64 percent (Class A shares, unadjusted for any sales charge),
in line with the 2.79 percent return of the fund's benchmark, the Salomon Smith
Barney World Government Bond Index. The fund's performance did exceed its
category average--the Lipper General
5
<PAGE> 6
PERFORMANCE UPDATE
World Income Funds category--which returned 2.09 percent for the first half of
1998. And, over the five year period, the fund has outperformed its peer group
average.
Q WHICH HOLDINGS HELPED THE FUND'S PERFORMANCE?
A As I mentioned earlier, the U.K. market performed extremely well in both
U.S. dollar and local currency terms. Significantly improved fiscal policy led
to a reduced supply of government bonds, which caused yields to fall in that
country. Another factor that helped the fund's performance was our relatively
large stake in U.S. dollars, which ranged from 54 percent to 59 percent during
the period. In a classic "flight to safety," many global investors sought out
U.S. dollars as a safe haven from Asia's problems. Increased demand for dollars
helped to bolster their performance versus other currencies across the globe.
Q WHICH POSITIONS DETRACTED FROM THE FUND'S PERFORMANCE?
A Our relatively light position in Japan modestly detracted from the fund's
performance. The country's ongoing economic struggle helped force yields lower
and bond prices somewhat higher. Given our relatively conservative approach, we
kept a moderate weighting at roughly 12 percent of net assets in Japan during
the period, compared to an 18 percent weighting for the Salomon index. While our
moderate position prohibited the fund from fully participating in the Japanese
bond rally, it also helped mitigate losses stemming from a weaker yen.
Q WHERE HAVE YOU FOUND OPPORTUNITIES LATELY AND WHICH POSITIONS DID YOU
ELIMINATE?
A Canada presented attractive opportunities. We also added to the fund's
Canadian holdings in late January, based on our view that interest rates in that
country are poised to go lower. At the end of the period, Kemper Global Income
Fund's North American bond market exposure was 48 percent with investments in
U.S. Treasuries, Canadian government and provincial AAA-rated bonds. As for
sales, we eliminated our holdings in Australia, based on our view that political
risks in the country are high and may bode negatively for the country's bonds
over the near term.
Q WHAT IS YOUR OUTLOOK FOR BONDS?
A We think that conditions are relatively benign. The Organization for
Economic Cooperation and Development (OECD) has recently lowered its global
growth projections, suggesting that inflation will remain muted and interest
rates could decline further in response to countries such as the U.K., Greece,
Canada and the U.S. In terms of currencies, we're relatively pessimistic about
the yen, but believe that other currencies are broadly in equilibrium with the
U.S. dollar. With that outlook in mind, we plan to maintain our U.S. dollar
currency weighting at roughly its current level.
6
<PAGE> 7
COUNTRY CONCENTRATIONS
GEOGRAPHIC COMPOSITION OF KEMPER GLOBAL INCOME FUND
Based on total investments on June 30, 1998, which is subject to change.
[BAR GRAPH]
<TABLE>
<CAPTION>
<S> <C>
UNITED STATES 30%
CANADA 20%
JAPAN 12%
NEW ZEALAND 11%
IRELAND 10%
UNITED KINGDOM 5%
FRANCE 5%
GERMANY 4%
ITALY 3%
</TABLE>
7
<PAGE> 8
PORTFOLIO STATISTICS
PORTFOLIO COMPOSITION*
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ON 6/30/98 ON 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN/U.S. GOVERNMENT
SECURITIES 93% 91%
- --------------------------------------------------------------------------------
OTHER** 3 5
- --------------------------------------------------------------------------------
CASH AND EQUIVALENTS 4 4
- --------------------------------------------------------------------------------
100% 100%
</TABLE>
[PIE CHART] [PIE CHART]
ON 6/30/98 ON 12/31/97
* Portfolio composition is subject to change.
** Includes supranational entities and corporates guaranteed by governments
QUALITY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ON 6/30/98 ON 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
AAA 76% 72%
- --------------------------------------------------------------------------------
AA 24 28
- --------------------------------------------------------------------------------
</TABLE>
[PIE CHART] [PIE CHART]
ON 6/30/98 ON 12/31/97
AVERAGE MATURITY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ON 6/30/98 ON 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
AVERAGE MATURITY 7.7 YEARS 6.9 YEARS
- --------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 9
PORTFOLIO OF INVESTMENTS
KEMPER GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS AT JUNE 30, 1998 (unaudited)
(IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
U.S. DOLLAR
CURRENCY ISSUER PRINCIPAL VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GOVERNMENT OBLIGATIONS (92.9%) AND CORPORATE OBLIGATIONS (2.9%)
- ---------------------------------------------------------------------------------------------------------------------
U.S. DOLLAR--28.8% Tokyo Metropolitan Government, 6.125%, 2006 8,900 $ 8,918
U.S. Treasury Bonds, 7.50%, 2024 3,900 4,833
U.S. Treasury Notes
6.375%, 2000 8,800 8,904
5.875%, 2005 2,300 2,342
------------------------------------------------------------------------------
24,997
- ---------------------------------------------------------------------------------------------------------------------
CANADIAN DOLLAR--19.5% Government of Canada
4.75%, 1999 7,050 4,766
8.00%, 2027 4,600 4,244
Province of British Columbia, 7.75%, 2003 5,100 3,806
Province of Ontario, 9.00%, 2004 5,150 4,143
------------------------------------------------------------------------------
16,959
- ---------------------------------------------------------------------------------------------------------------------
JAPANESE YEN--11.7% Government of Austria, 4.50%, 2005 300,000 2,610
Int'l Bank for Recon. and Dev., 4.75%, 2004 290,000 2,529
Kingdom of Belgium, 5.00%, 1999 230,000 1,763
Kingdom of Spain, 3.10%, 2006 400,000 3,222
------------------------------------------------------------------------------
10,124
- ---------------------------------------------------------------------------------------------------------------------
NEW ZEALAND DOLLAR--10.3% Government of New Zealand
6.50%, 2000 5,700 2,930
8.00%, 2004 6,700 3,699
8.00%, 2006 4,000 2,288
------------------------------------------------------------------------------
8,917
- ---------------------------------------------------------------------------------------------------------------------
IRISH PUNT--9.5% Government of Ireland
8.00%, 2000 1,250 1,867
6.50%, 2001 1,250 1,836
8.75%, 2012 2,400 4,535
------------------------------------------------------------------------------
8,238
- ---------------------------------------------------------------------------------------------------------------------
BRITISH POUND--4.8% Republic of Finland, 7.00%, 2000 900 1,492
United Kingdom
7.50%, 2006 450 826
8.00%, 2015 900 1,880
------------------------------------------------------------------------------
4,198
- ---------------------------------------------------------------------------------------------------------------------
FRENCH FRANC--4.7% French Treasury
6.75%, 2004 4,400 815
6.00%, 2025 5,300 957
Kingdom of Spain, 6.50%, 2001 13,000 2,279
------------------------------------------------------------------------------
4,051
- ---------------------------------------------------------------------------------------------------------------------
GERMAN DEUTSCHEMARK--3.8% Federal Republic of Germany
8.00%, 2002 2,700 1,696
6.875%, 2005 2,600 1,626
------------------------------------------------------------------------------
3,322
</TABLE>
9
<PAGE> 10
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
U.S. DOLLAR
CURRENCY ISSUER PRINCIPAL VALUE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ITALIAN LIRA--2.7% Italian Treasury, 8.50%, 2004 3,550,000 $ 2,364
------------------------------------------------------------------------------
------------------------------------------------------------------------------
TOTAL GOVERNMENT AND CORPORATE OBLIGATIONS--95.8%
(Cost: $85,974) 83,170
------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MONEY MARKET Yield--5.68%
INSTRUMENT--.6% Due--July 1998
(Cost: $499) $ 500 499
------------------------------------------------------------------------------
TOTAL INVESTMENTS--96.4%
(Cost: $86,473) 83,669
------------------------------------------------------------------------------
CASH AND OTHER ASSETS, LESS LIABILITIES--3.6% 3,163
------------------------------------------------------------------------------
NET ASSETS--100% $86,832
------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
- --------------------------------------------------------------------------------
The Fund is a non-diversified investment company and may invest a relatively
high percentage of its assets in the obligations of a limited number of issuers.
Based on the cost of investments of $86,473,000 for federal income tax purposes
at June 30, 1998, the gross unrealized appreciation was $631,000, the gross
unrealized depreciation was $3,435,000 and the net unrealized depreciation on
investments was $2,804,000.
See accompanying Notes to Financial Statements.
10
<PAGE> 11
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (unaudited)
(IN THOUSANDS)
<TABLE>
<S> <C>
- ------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------
Investments, at value
(Cost: $86,473) $ 83,669
- ------------------------------------------------------------------------
Cash 384
- ------------------------------------------------------------------------
Receivable for:
Interest 1,780
- ------------------------------------------------------------------------
Investments sold 1,240
- ------------------------------------------------------------------------
Fund shares sold 26
- ------------------------------------------------------------------------
TOTAL ASSETS 87,099
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
LIABILITIES AND NET ASSETS
- ------------------------------------------------------------------------
Payable for:
Fund shares redeemed 147
- ------------------------------------------------------------------------
Management fee 55
- ------------------------------------------------------------------------
Distribution services fee 11
- ------------------------------------------------------------------------
Administrative services fee 17
- ------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 4
- ------------------------------------------------------------------------
Trustees' fees and other 33
- ------------------------------------------------------------------------
Total liabilities 267
- ------------------------------------------------------------------------
NET ASSETS $ 86,832
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
ANALYSIS OF NET ASSETS
- ------------------------------------------------------------------------
Paid-in capital $138,261
- ------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (48,952)
- ------------------------------------------------------------------------
Net unrealized depreciation on investments and assets and
liabilities in foreign currencies (2,477)
- ------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $ 86,832
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
THE PRICING OF SHARES
- ------------------------------------------------------------------------
CLASS A SHARES
Net asset value and redemption price per share
($70,143 / 8,202 shares outstanding) $8.55
- ------------------------------------------------------------------------
Maximum offering price per share
(net asset value, plus 4.71% of
net asset value or 4.50% of offering price) $8.95
- ------------------------------------------------------------------------
CLASS B SHARES
Net asset value and redemption price
(subject to contingent deferred sales charge) per share
($15,233 / 1,779 shares outstanding) $8.56
- ------------------------------------------------------------------------
CLASS C SHARES
Net asset value and redemption price
(subject to contingent deferred sales charge) per share
($1,456 / 170 shares outstanding) $8.58
- ------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (unaudited)
(IN THOUSANDS)
<TABLE>
<S> <C>
- -----------------------------------------------------------------------
NET INVESTMENT INCOME
- -----------------------------------------------------------------------
Interest $ 2,833
- -----------------------------------------------------------------------
Expenses:
Management fee 349
- -----------------------------------------------------------------------
Distribution services fee 78
- -----------------------------------------------------------------------
Administrative services fee 99
- -----------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 131
- -----------------------------------------------------------------------
Professional fees 28
- -----------------------------------------------------------------------
Reports to shareholders 51
- -----------------------------------------------------------------------
Trustees' fees and other 8
- -----------------------------------------------------------------------
Total expenses 744
- -----------------------------------------------------------------------
NET INVESTMENT INCOME 2,089
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------------
Net realized gain on sales of investments and foreign
currency transactions 1,906
- -----------------------------------------------------------------------
Change in net unrealized depreciation on investments and
assets and liabilities in foreign currencies (1,618)
- -----------------------------------------------------------------------
Net gain on investments 288
- -----------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,377
- -----------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1998 DECEMBER 31,
(UNAUDITED) 1997
- ----------------------------------------------------------------------------------------
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 2,089 6,045
- ----------------------------------------------------------------------------------------
Net realized gain (loss) 1,906 (2,323)
- ----------------------------------------------------------------------------------------
Change in net unrealized depreciation (1,618) (2,309)
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,377 1,413
- ----------------------------------------------------------------------------------------
Distribution from net investment income (2,647) (6,027)
- ----------------------------------------------------------------------------------------
Tax return of capital distribution -- (860)
- ----------------------------------------------------------------------------------------
Total dividends to shareholders (2,647) (6,887)
- ----------------------------------------------------------------------------------------
Net decrease from capital share transactions (11,952) (27,233)
- ----------------------------------------------------------------------------------------
TOTAL DECREASE IN NET ASSETS (12,222) (32,707)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------
Beginning of period 99,054 131,761
- ----------------------------------------------------------------------------------------
END OF PERIOD $ 86,832 99,054
- ----------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 DESCRIPTION OF THE
FUND Kemper Global Income Fund is an open-end management
investment company organized as a business trust
under the laws of Massachusetts. The Fund currently
offers three classes of shares. Class A shares are
sold to investors subject to an initial sales
charge. Class B shares are sold without an initial
sales charge but are subject to higher ongoing
expenses than Class A shares and a contingent
deferred sales charge payable upon certain
redemptions. Class B shares automatically convert
to Class A shares six years after issuance. Class C
shares are sold without an initial sales charge but
are subject to higher ongoing expenses than Class A
shares and a contingent deferred sales charge
payable upon certain redemptions within one year of
purchase. Class C shares do not convert into
another class. Class I shares are no longer
offered. Differences in class expenses will result
in the payment of different per share income
dividends by class. All shares of the Fund have
equal rights with respect to voting, dividends and
assets, subject to class specific preferences.
- --------------------------------------------------------------------------------
2 SIGNIFICANT
ACCOUNTING POLICIES INVESTMENT VALUATION. Investments are stated at
value. Fixed income securities are valued by using
market quotations, or independent pricing services
that use prices provided by market makers or
estimates of market values obtained from yield data
relating to instruments or securities with similar
characteristics. Portfolio securities that are
traded on a domestic securities exchange are valued
at the last sale price on the exchange where
primarily traded or, if there is no recent sale, at
the last current bid quotation. Portfolio
securities that are primarily traded on foreign
securities exchanges are generally valued at the
preceding closing values of such securities on
their respective exchanges where primarily traded.
Securities not so traded are valued at the last
current bid quotation if market quotations are
available. Financial futures and options are valued
at the settlement price established each day by the
board of trade or exchange on which they are
traded. Over-the-counter traded options are valued
based upon prices provided by market makers.
Forward foreign currency contracts and foreign
currencies are valued at the forward and current
exchange rates, respectively, prevailing on the day
of valuation. Other securities and assets are
valued at fair value as determined in good faith by
the Board of Trustees.
FOREIGN CURRENCY TRANSLATION. The books and records
of the Fund are maintained in U.S. dollars.
Investment securities and other assets and
liabilities denominated in a foreign currency are
translated into U.S. dollars at the prevailing
rates of exchange. Purchases and sales of
investment securities, income and expenses are
translated into U.S. dollars at the prevailing
exchange rates on the respective dates of the
transactions. The Fund includes that portion of the
results of operations resulting from changes in
foreign exchange rates with net realized and
unrealized gain (loss) on investments, as
appropriate.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME.
Investment transactions are accounted for on the
trade date (date the order to buy or sell is
executed). Interest income is recorded on the
accrual basis and includes discount amortization on
fixed income securities. Realized gains and losses
from investment transactions are reported on an
identified cost basis.
FUND SHARE VALUATION. Fund shares are sold and
redeemed on a continuous basis at net asset value
(plus an initial sales charge on most sales of
Class A shares). Proceeds payable on redemption of
Class B and Class C shares will be reduced by the
amount of any applicable contingent deferred sales
charge. On each day
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
the New York Stock Exchange is open for trading,
the net asset value per share is determined as of
the earlier of 3:00 p.m. Chicago time or the close
of the Exchange. The net asset value per share is
determined separately for each class by dividing
the Fund's net assets attributable to that class by
the number of shares of the class outstanding.
Because of the need to obtain prices as of the
close of trading on various exchanges throughout
the world, the calculation of net asset value does
not take place contemporaneously with the
determination of the prices of the Fund's foreign
securities.
FEDERAL INCOME TAXES. The Fund has complied with
the special provisions of the Internal Revenue Code
available to investment companies during the six
months June 30, 1998. The accumulated net realized
loss on sales of investments for federal income tax
purposes at June 30, 1998, amounting to
approximately $44,079,000, is available to offset
future taxable gains. However, of this amount, the
availability of approximately $21,000,000 obtained
through prior fund acquisitions is limited to
$7,000,000 per year from 1999 through 2001. If not
applied, the total loss carryover expires during
the period 1999 through 2002.
DIVIDENDS TO SHAREHOLDERS. The Fund declares and
pays dividends of net investment income monthly and
any net realized capital gains annually, which are
recorded on the ex-dividend date. Dividends are
determined in accordance with income tax principles
which may treat certain transactions differently
from generally accepted accounting principles.
These differences are primarily due to differing
treatments for certain transactions such as foreign
currency transactions.
- --------------------------------------------------------------------------------
3 TRANSACTIONS WITH
AFFILIATES MANAGEMENT AGREEMENT. The Fund has a management
agreement with Scudder Kemper Investments, Inc.
(Scudder Kemper) and pays a management fee at an
annual rate of .75% of the first $250 million of
average daily net assets declining to .62% of
average daily net assets in excess of $12.5
billion. The Fund incurred a management fee of
$349,000 for the six months ended June 30, 1998.
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT.
The Fund has an underwriting and distribution
services agreement with Kemper Distributors, Inc.
(KDI). Underwriting commissions paid in connection
with the distribution of Class A shares are as
follows:
<TABLE>
<CAPTION>
COMMISSIONS COMMISSIONS ALLOWED
RETAINED BY KDI BY KDI TO FIRMS
--------------- -------------------
<S> <C> <C>
Six months ended June 30, 1998 $2,000 $14,000
</TABLE>
For services under the distribution services
agreement, the Fund pays KDI a fee of .75% of
average daily net assets of the Class B and Class C
shares. Pursuant to the agreement, KDI enters into
related selling group agreements with various firms
at various rates for sales of Class B and Class C
shares. In addition, KDI receives any contingent
deferred sales charges (CDSC) from redemptions of
Class B and Class C shares. Distribution fees, CDSC
and commissions related to Class B and Class C
shares are as follows:
<TABLE>
<CAPTION>
DISTRIBUTION FEES COMMISSIONS AND
AND CDSC DISTRIBUTION FEES PAID
RECEIVED BY KDI BY KDI TO FIRMS
----------------- ----------------------
<S> <C> <C>
Six months ended June 30, 1998 $112,000 32,000
</TABLE>
14
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
ADMINISTRATIVE SERVICES AGREEMENT. The Fund has an
administrative services agreement with KDI. For
providing information and administrative services
to shareholders, the Fund pays KDI a fee at an
annual rate of up to .25% of average daily net
assets of each class. KDI in turn has various
agreements with financial services firms that
provide these services and pays these firms based
on assets of Fund accounts the firms service.
Administrative services fees (ASF) paid are as
follows:
<TABLE>
<CAPTION>
ASF PAID BY ASF PAID
THE FUND TO KDI BY KDI TO FIRMS
---------------- ----------------
<S> <C> <C>
Six months ended June 30, 1998 $99,000 98,000
</TABLE>
SHAREHOLDER SERVICES AGREEMENT. Pursuant to a
services agreement with the Fund's transfer agent,
Kemper Service Company (KSvC) is the shareholder
service agent of the Fund. Under the agreement,
KSvC received shareholder services fees of $100,000
for the six months ended June 30, 1998.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Fund are also officers or directors of
Scudder Kemper. During the six months ended June
30, 1998, the Fund made no direct payments to its
officers and incurred trustees' fees of $6,000 to
independent trustees.
- --------------------------------------------------------------------------------
4 INVESTMENT
TRANSACTIONS For the six months ended June 30, 1998, investment
transactions (excluding short-term instruments) are
as follows (in thousands):
Purchases $ 99,028
Proceeds from sales 111,081
15
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
5 CAPITAL SHARE
TRANSACTIONS
The following table summarizes the activity in
capital shares of the Fund (in thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES SOLD
Class A 330 $ 2,843 862 $ 7,486
------------------------------------------------------------------------------
Class B 143 1,238 735 6,386
------------------------------------------------------------------------------
Class C 52 441 99 866
------------------------------------------------------------------------------
Class I -- -- 1 7
------------------------------------------------------------------------------
------------------------------------------------------------------------------
SHARES ISSUED IN REINVESTMENT OF DIVIDENDS
Class A 171 1,471 378 3,265
------------------------------------------------------------------------------
Class B 42 364 163 1,406
------------------------------------------------------------------------------
Class C 2 20 6 53
------------------------------------------------------------------------------
------------------------------------------------------------------------------
SHARES REDEEMED
Class A (1,641) (14,143) (3,721) (32,238)
------------------------------------------------------------------------------
Class B (464) (4,012) (1,601) (13,911)
------------------------------------------------------------------------------
Class C (17) (149) (63) (550)
------------------------------------------------------------------------------
Class I (3) (25) (1) (3)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
CONVERSION OF SHARES
Class A 937 8,089 1,270 10,982
------------------------------------------------------------------------------
Class B (936) (8,089) (1,268) (10,982)
------------------------------------------------------------------------------
NET DECREASE FROM CAPITAL
SHARE TRANSACTIONS $(11,952) $(27,233)
------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
6 FORWARD FOREIGN
CURRENCY CONTRACTS In order to help protect itself against a decline
in the value of particular foreign currencies
against the U.S. Dollar, the Fund has entered into
forward contracts to deliver foreign currency in
exchange for U.S. Dollars as described below. The
Fund bears the market risk that arises from changes
in foreign exchange rates, and accordingly, the net
unrealized gain or loss on these contracts is
reflected in the accompanying financial statements.
The Fund also bears the credit risk (which is
limited to the unrealized gain, if any) if the
counterparty fails to perform under the contract.
At June 30, 1998, the Fund's outstanding forward
foreign currency contracts are as follows (in
thousands):
<TABLE>
<CAPTION>
FOREIGN CURRENCY CONTRACT AMOUNT SETTLEMENT UNREALIZED
TO BE DELIVERED IN U.S. DOLLARS DATE GAIN
-------------------------------------------------------------------------
<S> <C> <C> <C>
19,250 Canadian Dollars $13,166 September '98 $ 60
-------------------------------------------------------------------------
11,950 New Zealand Dollars 6,488 July '98 295
-------------------------------------------------------------------------
NET UNREALIZED GAIN $355
-------------------------------------------------------------------------
</TABLE>
16
<PAGE> 17
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
--------------------------------------------
CLASS A
--------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE 30, -------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------
Net asset value, beginning of period $8.58 8.97 9.05 8.55 9.29
- ---------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .20 .48 .52 .61 .60
- ---------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .03 (.33) (.02) 1.05 (.74)
- ---------------------------------------------------------------------------------------
Total from investment operations .23 .15 .50 1.66 (.14)
- ---------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .26 .47 .58 1.16 .38
- ---------------------------------------------------------------------------------------
Tax return of capital distribution -- .07 -- -- .22
- ---------------------------------------------------------------------------------------
Total dividends .26 .54 .58 1.16 .60
- ---------------------------------------------------------------------------------------
Net asset value, end of period $8.55 8.58 8.97 9.05 8.55
- ---------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.64% 1.80 5.87 19.89 (1.47)
- ---------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------
Expenses 1.35% 1.32 1.48 1.34 1.53
- ---------------------------------------------------------------------------------------
Net investment income 4.73% 5.56 5.77 6.43 6.67
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------
CLASS B
-------------------------------------------------------
MAY 31
SIX MONTHS YEAR ENDED DECEMBER 31, TO
ENDED JUNE 30, ----------------------- DECEMBER 31,
1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- --------------------------------------------------------------------------------------------------
Net asset value, beginning of period $8.60 9.00 9.09 8.56 8.70
- --------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .17 .41 .46 .56 .30
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .01 (.33) (.02) 1.05 (.14)
- --------------------------------------------------------------------------------------------------
Total from investment operations .18 .08 .44 1.61 .16
- --------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .22 .42 .53 1.08 .19
- --------------------------------------------------------------------------------------------------
Tax return of capital distribution -- .06 -- -- .11
- --------------------------------------------------------------------------------------------------
Total dividends .22 .48 .53 1.08 .30
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $8.56 8.60 9.00 9.09 8.56
- --------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.11% 1.03 5.11 19.21 1.89
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- --------------------------------------------------------------------------------------------------
Expenses 2.21% 2.18 2.14 1.98 2.27
- --------------------------------------------------------------------------------------------------
Net investment income 3.87% 4.70 5.11 5.79 5.89
- --------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
---------------------------------------------------
CLASS C
---------------------------------------------------
SIX MONTHS MAY 31
ENDED YEAR ENDED DECEMBER 31, TO
JUNE 30, ----------------------- DECEMBER 31,
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------
Net asset value, beginning of period $8.62 9.02 9.09 8.56 8.70
- ---------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .17 .42 .48 .57 .30
- ---------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) .01 (.33) (.02) 1.05 (.14)
- ---------------------------------------------------------------------------------------------
Total from investment operations .18 .09 .46 1.62 .16
- ---------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income .22 .43 .53 1.09 .19
- ---------------------------------------------------------------------------------------------
Tax return of capital distribution -- .06 -- -- .11
- ---------------------------------------------------------------------------------------------
Total dividends .22 .49 .53 1.09 .30
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $8.58 8.62 9.02 9.09 8.56
- ---------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) 2.13% 1.09 5.31 19.26 1.91
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
- ---------------------------------------------------------------------------------------------
Expenses 2.13% 2.11 2.06 2.06 2.23
- ---------------------------------------------------------------------------------------------
Net investment income 3.95% 4.77 5.19 5.71 5.93
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA FOR ALL CLASSES
- ------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ------------------------------------
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets at end of period (in thousands) $86,832 99,054 131,761 152,959 170,700
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 223% 283 276 220 378
- ------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Total return does not reflect the effect of any sales charges. Per share
data for the six months ended June 30, 1998, and the years ended 1997 and 1996
were determined based on average shares outstanding. Data for the period ended
June 30, 1998 is unaudited.
18
<PAGE> 19
NOTES
19
<PAGE> 20
TRUSTEES
OFFICERS
DANIEL PIERCE
Chairman and Trustee
DAVID W. BELIN
Trustee
LEWIS A. BURNHAM
Trustee
DONALD L. DUNAWAY
Trustee
ROBERT B. HOFFMAN
Trustee
DONALD R. JONES
Trustee
SHIRLEY D. PETERSON
Trustee
WILLIAM P. SOMMERS
Trustee
EDMOND D. VILLANI
Trustee
MARK S. CASADY
President
PHILIP J. COLLORA
Vice President
and Secretary
JOHN R. HEBBLE
Treasurer
JERARD K. HARTMAN
Vice President
THOMAS W. LITTAUER
Vice President
ANN M. MCCREARY
Vice President
ROBERT C. PECK, JR.
Vice President
KATHRYN L. QUIRK
Vice President
LINDA J. WONDRACK
Vice President
MAUREEN E. KANE
Assistant Secretary
CAROLINE PEARSON
Assistant Secretary
ELIZABETH C. WERTH
Assistant Secretary
<TABLE>
<S> <C>
..........................................................................................................
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
..........................................................................................................
SHAREHOLDER KEMPER SERVICE COMPANY
SERVICE AGENT P.O. Box 419557
Kansas City, MO 64141
..........................................................................................................
CUSTODIAN AND INVESTORS FIDUCIARY TRUST COMPANY
TRANSFER AGENT 801 Pennsylvania Avenue
Kansas City, MO 64105
..........................................................................................................
FOREIGN CUSTODIAN THE CHASE MANHATTAN BANK
Chase Metro Tech Center
Brooklyn, NY 11245
..........................................................................................................
PRINCIPAL UNDERWRITER KEMPER DISTRIBUTORS, INC.
222 South Riverside Plaza Chicago, IL 60606
www.kemper.com
</TABLE>
KEMPER LOGO
Printed on recycled paper in the U.S.A.
This report is not to be distributed
unless preceded or accompanied by a
Kemper Global and International Funds prospectus.
KGIF - 3 (8/98) 1053070
LONG-TERM INVESTING IN A SHORT-TERM WORLD(SM)
TRUSTEES&OFFICERS
